TSX edges up with help from Valeant

Reuters Staff

3 Min Read

A sign displaying TSX information is seen in Toronto November 20, 2008. REUTERS/Mark Blinch

TORONTO, May 30, (Reuters) - Canada’s main stock index edged higher on Friday, pulled up by Valeant Pharmaceuticals International (VRX.TO) after it again boosted the cash component of its takeover bid for drugmaker Allergan, a move that bucked up market sentiment following the release of weak economic growth figures early in the day.

Still, the Toronto stock market’s benchmark index slipped 0.3 percent for May, its first monthly decline in nearly a year.

Valeant was the day’s biggest net gainer after it adjusted its bid for Botox-maker Allergan Inc (AGN.N) for the second time this week, contingent on the two sides negotiating. Valeant rose 1.6 percent to C$142.34.

That helped overshadow data that showed sluggish economic growth in the first quarter. Domestic gross domestic product (GDP) grew by an annualized 1.2 percent in the first three months, slower than the 1.8 percent expected by economists.

“Investors are looking past the slower GDP numbers because the expectation is that the economy can certainly strengthen going forward,” said Elvis Picardo, strategist at Global Securities. “In the absence of a catastrophic event, the path of least resistance for the market is upward.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 15.21 points, or 0.1 percent, at 14,604.16. May was the first month the index has fallen since last June.

“There’s some caution that creeps in when you have advances month after month and perhaps this giveback is reflecting that caution,” Picardo said.

Shares of Bombardier (BBDb.TO) fell 2.4 percent to C$3.69 after the company said its new CSeries jet suffered an “engine-related incident” while stationary during maintenance testing. Flight testing of the aircraft has been halted, the company said. Half of the index’s 10 main sectors rose, including the mining-heavy materials sector .GSPTTMT, which added 0.6 percent, while shares of energy companies .SPTTEN gained 0.3 percent.